Alphabet shares fell 7% after Google A.I.

 Alphabet shares fell 7% after Google A.I.

Shares of Google's parent company Alphabet closed down more than 7% on Wednesday after the company held an event in which it promoted a new AI chatbot called Bard, a day after rival Microsoft held its own event to showcase new AI technologies in rival search engine. Anesthetic. Google officially announced Bard on Monday, confirming previous CNBC reports, and the company said it would begin rolling out the technology in the coming weeks.

Google CEO Sundar Pichai speaks during the Google I/O keynote session at Shoreline Amphitheatre in Mountain View, California on May 7, 2019.

During Wednesday's event, broadcast live from Paris, Google executives discussed some of Bard's capabilities. The show showed how Bard can be used to showcase the pros and cons of buying an electric car, for example, or to plan a trip in Northern California. Bard is powered by the company's large language model LaMADA, or the language model for dialog applications. The company said in a blog post on Monday that Google will open the conversation technology to "trusted testers" before making it more widely available to the public. The event also showcased AI improvements to a number of other Google products, including Maps and Google Lens, which allow people to search for images from their phone's camera.Alphabet shares fell during the event, suggesting that investors were hoping for more in light of increased competition from Microsoft. The Google event was held just one day after Microsoft hosted its AI event at its headquarters in Redmond, Washington. The Microsoft event focused on new AI-powered updates to the company's Bing search engine and Edge browser. Bing, which is second far behind Google in search, will now allow users to get more conversation responses to questions.

Microsoft's product updates are built on technology from OpenAI ChatGPT maker, in which Microsoft has invested billions. ChatGPT is an artificial intelligence program that generates text based on complex written prompts. The web-based tool went viral after its debut in November, prompting analysts and Google employees to question whether the company lags behind in artificial intelligence, an area that has been Google's primary focus for several years. In response to the popularity of ChatGPT, Google announced an internal "red code" to accelerate the development of Bard and other AI products, and the company's founders, Larry Page and Sergey Brin, reportedly once again participated, after years of stepping down from day to day – a working day at the company.

Although Microsoft's recent investments in artificial intelligence are increasing pressure on Google search, some analysts say Microsoft will take time to see any significant gains. "Search optimizations will work as a backwind [for long-term ad revenue], but it will take time to get users back to Bing and they will need a disruptor to keep advertisers away from Google," Jefferies analyst Brent Thill wrote one Tuesday. Note. "We see these updates as the tip of the iceberg of MSFT's AI capabilities, with the greatest opportunity in enterprise use cases." Analysts at Evercore said there was "little additional news" from Google's event, which may have contributed to the stock price drop. Analysts said they believed this was an early and "possibly urgent" look at artificial intelligence that Google has been working on for years.

However, analysts said they believe Google's AI technology is "at least as good" as its competitor. "By leveraging years of investment in AI (which nearly doubled capital expenditure in 2018) and unprecedented scale, this should help the company defend its market position in the long run," they wrote in a note Wednesday.

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